8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 6, 2005

UTSTARCOM, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-29661	52-1782500
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1275 Harbor Bay Parkway

Alameda, California 94502

(Address of principal executive offices)    (Zip code)

(510) 864-8800

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into Material Definitive Agreements

Restricted Stock Agreement

On September 6, 2005, UTStarcom, Inc. (the “Company”) entered into a restricted stock agreement (the “Restricted Stock Agreement”) with Mr. Francis P. Barton, Executive Vice President and Chief Financial Officer of the Company.  The Restricted Stock Agreement provides for the purchase by Mr. Barton of 100,000 shares of common stock of the Company, as previously described in the Company’s Current Report on Form 8-K dated July 29, 2005 and filed on August 4, 2005 (the “August 4 Report”). A copy of the form of Restricted Stock Agreement, which has been approved for use under the Company’s 1997 Stock Plan, is included as Exhibit 10.1 of this Current Report on Form 8-K (this “Report”) and is incorporated by reference herein.

Change of Control Agreement

On September 6, 2005, the Company entered into a Change of Control/Involuntary Termination Severance Agreement (the “Change of Control Agreement”) with Mr. Barton.  The Change of Control Agreement provides that if Mr. Barton’s employment with the Company terminates as a result of a change in control involuntary termination at any time within 12 months after a change of control, (i) he will be entitled to 24 months of base salary as in effect as of the date of such termination payable in a lump sum within 30 days of termination and 100% of the bonus for the year in which termination occurs, (ii) all stock options and share purchase rights granted to him will become fully vested and exercisable as of the date of termination and all stock held by him that is subject to a right of repurchase by the Company that was purchased prior to the change of control will have such right lapse, and (iii) the Company will continue to provide him the same level of health coverage as in effect on the day immediately preceding the termination date until the earlier of the date he is no longer eligible to receive continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or 12 months from the termination date.

The Change of Control Agreement further provides that if Mr. Barton’s employment with the Company terminates as a result of a regular involuntary termination during the term of the Change of Control Agreement, he will be entitled to (i) 12 months of his base salary as in effect as of the date of such termination, less applicable withholding, payable in a lump sum within 30 days of the regular involuntary termination, (ii) 100% of his bonus for the year in which the regular involuntary termination occurs and (iii) continued vesting in stock options and share purchase rights granted to him prior to the date of the regular involuntary termination, for a period of 12 months from the date of the regular involuntary termination, with the right to exercise said stock options and share purchase rights within 90 days from the end of said twelve-month period.

The above summary is qualified in its entirety by reference to the full text of the Change of Control Agreement, a copy of which is included as Exhibit 10.2 of this Report and is incorporated by reference herein.

Indemnification Agreement

On September 6, 2005, the Company entered into an indemnification agreement with Mr. Barton. The indemnification agreement is substantially identical to the Company’s standard form of indemnification agreement previously filed with the Securities and Exchange Commission.

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Other Agreement

A copy of the agreement dated July 29, 2005 that the Company entered into with Mr. Barton, which was previously described in the August 4 Report, is included as Exhibit 10.3 of this Report.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

Exhibit Number	EXHIBIT DESCRIPTION
10.1	Form of Restricted Stock Agreement.
10.2	Change of Control/Involuntary Termination Severance Agreement by and between Francis Barton and UTStarcom, Inc., dated September 6, 2005.
10.3	Agreement by and between Francis Barton and UTStarcom, Inc., dated July 29, 2005.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	UTSTARCOM, INC.
Date: September 12, 2005	By:	/s/ Michael J. Sophie
	Name:	Michael J. Sophie
	Title:	Executive Vice President and Chief Operating Officer

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EXHIBIT INDEX

Exhibit Number	EXHIBIT DESCRIPTION
10.1	Form of Restricted Stock Agreement.
10.2	Change of Control/Involuntary Termination Severance Agreement by and between Francis Barton and UTStarcom, Inc., dated September 6, 2005.
10.3	Agreement by and between Francis Barton and UTStarcom, Inc., dated July 29, 2005.

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EX-10.1

Exhibit 10.1

UTSTARCOM, INC.

1997 STOCK PLAN

NOTICE OF GRANT OF STOCK PURCHASE RIGHT

Unless otherwise defined herein, the terms defined in the 1997 Stock Plan will have the same defined meanings in this Notice of Grant of Stock Purchase Right (the “Notice of Grant”).

Name:

Address:

You have been granted the right to purchase Common Stock of the Company, subject to the Company’s Reacquisition Right (as described in the attached Restricted Stock Agreement), as follows:

Grant Number
Vesting Commencement Date
Date of Grant
Price Per Share	$0.00125
Total Number of Shares Subject
to Stock Purchase Right
Expiration Date:

YOU MUST PURCHASE THE SHARES BEFORE THE EXPIRATION DATE OR THE STOCK PURCHASE RIGHT WILL TERMINATE AND YOU WILL HAVE NO FURTHER RIGHT TO PURCHASE THE SHARES.  By your signature and the signature of the Company’s representative below, you and the Company agree that this Stock Purchase Right is granted under and governed by the terms and conditions of the 1997 Stock Plan and the Restricted Stock Agreement, attached hereto as Exhibit A-1, both of which are made a part of this document.  You further agree to execute the attached Restricted Stock Agreement as a condition to purchasing any Shares under this Stock Purchase Right.

PURCHASER	UTSTARCOM, INC.
Signature	By
Print Name	Title

EXHIBIT A-1

UTSTARCOM, INC.

1997 STOCK PLAN

RESTRICTED STOCK AGREEMENT

Unless otherwise defined herein, the terms defined in the 1997 Stock Plan (the “Plan”) will have the same defined meanings in this Restricted Stock Agreement.

WHEREAS, the individual named in the Notice of Grant, (the “Purchaser”) is a Service Provider, and the Purchaser’s continued participation in the affairs of the Company is considered by the Company to be important for the Company’s continued growth; and

WHEREAS in order to give the Purchaser an opportunity to acquire an equity interest in the Company as an incentive for the Purchaser to continue to participate in the affairs of the Company, the Administrator has granted to the Purchaser a Stock Purchase Right subject to the terms and conditions of the Plan and the Notice of Grant, which are incorporated herein by reference, and pursuant to this Restricted Stock Agreement (the “Agreement”).

NOW THEREFORE, the parties agree as follows:

1.Sale of Stock.  The Company hereby agrees to sell to the Purchaser and the Purchaser hereby agrees to purchase the number of shares of the Company’s Common Stock (the “Restricted Stock”), at the per Share purchase price and as otherwise described in the Notice of Grant.

2.Payment of Purchase Price.  The purchase price for the Restricted Stock, if any, may be paid by delivery to the Company at the time of execution of this Agreement of cash, a check, or some combination thereof, together with any applicable withholding taxes.

3.Reacquisition Right.  In the event the Purchaser ceases to be a Service Provider for any or no reason (including death or Disability) before all of the Shares of Restricted Stock are released from the Company’s Reacquisition Right (see Section 4), all Unreleased Shares (as defined in Section 4) will thereupon be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company (the “Reacquisition Right”).  The Purchaser will not be entitled to a refund of the price paid for any Shares of Restricted Stock returned to the Company pursuant to this Section 3.  Upon such termination, the Company will become the legal and beneficial owner of the Shares of Restricted Stock being forfeited and reacquired by the Company and all rights and interests therein or relating thereto, and the Company will have the right to retain and transfer to its own name the number of Shares of Restricted Stock being reacquired by the Company.

4.Release of Shares From Reacquisition Right.

(a)Vesting Schedule.  25% of the Shares will vest after each successive one-year anniversary following the Vesting Commencement Date, such that 100% of the Shares will be fully vested on the four-year anniversary of the Vesting Commencement Date, provided that the Purchaser continues to be a Service Provider through each such date.

(b)Any of the Shares that have not yet been released from the Reacquisition Right are referred to herein as “Unreleased Shares.”

5.Restriction on Transfer.  Except for the escrow described in Section 6 or the transfer of the Shares to the Company contemplated by this Agreement, none of the Shares or any beneficial interest therein will be transferred, encumbered or otherwise disposed of in any way until such Shares are released from the Company’s Reacquisition Right in accordance with the provisions of this Agreement.  Any distribution or delivery to be made to the Purchaser under this Agreement will, if the Purchaser is then deceased, be made to the Purchaser’s designated beneficiary, or if no beneficiary survives the Purchaser, to the administrator or executor of the Purchaser’s estate.  Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

6.Escrow of Shares.

(a)All Shares of Restricted Stock will, upon execution of this Agreement, be delivered and deposited with an escrow holder designated by the Company (the “Escrow Holder”).  The Shares of Restricted Stock and stock assignment will be held by the Escrow Holder until such time as the Company’s Reacquisition Right expires or the date the Purchaser ceases to be a Service Provider.

(b)The Escrow Holder will not be liable for any act it may do or omit to do with respect to holding the Unreleased Shares in escrow while acting in good faith and in the exercise of its judgment.

(c)Upon the Purchaser’s termination as a Service Provider for any reason, the Escrow Holder, upon receipt of written notice of such termination, will take all steps necessary to accomplish the transfer of the Unreleased Shares to the Company.  The Purchaser hereby appoints the Escrow Holder with full power of substitution, as the Purchaser’s true and lawful attorney-in-fact with irrevocable power and authority in the name and on behalf of the Purchaser to take any action and execute all documents and instruments, including, without limitation, stock powers which may be necessary to transfer the certificate or certificates evidencing such Unreleased Shares to the Company upon such termination.

(d)When a portion of the Shares has been released from the Reacquisition Right, upon request, the Escrow Holder will take all steps necessary to accomplish the transfer of the Unreleased Shares to the Purchaser.

(e)Subject to the terms hereof, the Purchaser will have all the rights of a shareholder with respect to the Shares while they are held in escrow, including without limitation, the right to vote the Shares and to receive any cash dividends declared thereon.

(f)In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, split-up, share combination, or other change in the corporate structure of the Company affecting the Common Stock, the Shares of Restricted Stock will be increased, reduced or otherwise changed, and by virtue of any such change the Purchaser will in his capacity as owner of Unreleased Shares that have been awarded to him be entitled to new or additional or different shares of stock, cash or securities (other than rights or warrants to purchase securities); such new or additional or different shares, cash or securities will thereupon be considered to be Unreleased Shares and will be subject to all of the conditions and restrictions which were

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applicable to the Unreleased Shares pursuant to this Agreement.  If the Purchaser receives rights or warrants with respect to any Unreleased Shares, such rights or warrants may be held or exercised by the Purchaser, provided that until such exercise any such rights or warrants and after such exercise any shares or other securities acquired by the exercise of such rights or warrants will be considered to be Unreleased Shares and will be subject to all of the conditions and restrictions which were applicable to the Unreleased Shares pursuant to this Agreement.  The Administrator in its absolute discretion at any time may accelerate the vesting of all or any portion of such new or additional shares of stock, cash or securities, rights or warrants to purchase securities or shares or other securities acquired by the exercise of such rights or warrants.

(g)The Company may instruct the transfer agent for its Common Stock to place a legend on the certificates representing the Restricted Stock or otherwise note its records as to the restrictions on transfer set forth in this Agreement.

7.Withholding of Taxes.  Notwithstanding any contrary provision of this Agreement, no certificate representing the Shares of Restricted Stock may be released from the escrow established pursuant to Section 6, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by the Participant with respect to the payment of income, employment and other taxes which the Company determines must be withheld with respect to such Shares.  The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit the Participant to satisfy such tax withholding obligation, in whole or in part by one or more of the following (without limitation): (a) paying cash, (b) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum amount required to be withheld, (c) delivering to the Company already vested and owned Shares having a Fair Market Value equal to the amount required to be withheld, or (d) selling a sufficient number of such Shares otherwise deliverable to Participant through such means as the Company may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld.

8.General Provisions.

(a)This Agreement will be governed by the internal substantive laws, but not the choice of law rules of California.  This Agreement, subject to the terms and conditions of the Plan and the Notice of Grant, represents the entire agreement between the parties with respect to the purchase of the Shares by the Purchaser.  Subject to Section 14(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan will prevail.  Unless otherwise defined herein, the terms defined in the Plan will have the same defined meanings in this Agreement.

(b)Any notice, demand or request required or permitted to be given by either the Company or the Purchaser pursuant to the terms of this Agreement will be in writing and will be deemed given when delivered personally or deposited in the U.S. mail, First Class with postage prepaid, and addressed to the parties at the addresses of the parties set forth at the end of this Agreement or such other address as a party may request by notifying the other in writing.

Any notice to the Escrow Holder will be sent to the Company’s address with a copy to the other party hereto.

(c)The rights of the Company under this Agreement will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns.  The rights and obligations of the

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Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

(d)Either party’s failure to enforce any provision of this Agreement will not in any way be construed as a waiver of any such provision, nor prevent that party from thereafter enforcing any other provision of this Agreement.  The rights granted both parties hereunder are cumulative and will not constitute a waiver of either party’s right to assert any other legal remedy available to it.

(e)The Purchaser agrees upon request to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement.

(f)Purchaser acknowledges and agrees that the vesting of Shares of Restricted Stock pursuant to Section 4 hereof is earned only by continuing as a Service Provider at the will of the Company (and not through the act of being hired or purchasing Shares hereunder).  Purchaser further acknowledges and agrees that this Agreement, the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued engagement as a Service Provider for the vesting period, for any period, or at all, and will not interfere with the Purchaser’s right or the Company’s right to terminate the Purchaser’s relationship as a Service Provider at any time, with or without cause.

By Purchaser’s signature below, Purchaser represents that he or she is familiar with the terms and provisions of the Plan, and hereby accepts this Agreement subject to all of the terms and provisions thereof.  Purchaser has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of this Agreement.  Purchaser agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Agreement.  Purchaser further agrees to notify the Company upon any change in the residence indicated in the Notice of Grant.

PURCHASER:	UTSTARCOM, INC.
Signature	By
Print Name	Title
Date:                             , 200[    ]	Date:                             , 200[    ]

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EX-10.2

Exhibit 10.2

UTSTARCOM, INC.

CHANGE OF CONTROL/INVOLUNTARY TERMINATION SEVERANCE AGREEMENT

This Change of Control Severance Agreement (the “Agreement”) is made and entered into effective as of September 6, 2005 (the “Effective Date”), by and between Francis Barton (the “Employee”) and UTStarcom, Inc., a Delawarecorporation (the “Company”).  Certain capitalized terms used in this Agreement are defined in Section 1 below.

R E C I T A L S

A.Employee is commencing his employment with the Company in the capacity of Executive Vice President and Chief Financial Officer, and the Company anticipates that Employee’s resposibilities with the Company shall initially consist of managing and directing the Company’s global finance and accounting employees.

B.It is expected that the Company from time to time will consider the possibility of a Change of Control.  The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to the Employee and can cause the Employee to consider alternative employment opportunities.

C.The Board believes that it is in the best interests of the Company and its shareholders to provide the Employee with an incentive to continue his employment and to maximize the value of the Company upon a Change of Control for the benefit of its shareholders.

D.In order to provide the Employee with enhanced financial security and sufficient encouragement to remain with the Company notwithstanding the possibility of a Change of Control, the Board believes that it is imperative to provide the Employee with certain severance benefits upon the Employee’s termination of employment following a Change of Control.

AGREEMENT

In consideration of the mutual covenants herein contained and the continued employment of Employee by the Company, the parties agree as follows:

1.Definition of Terms.  The following terms referred to in this Agreement shall have the following meanings:

(a)Cause.  “Cause” shall mean (i) any act of personal dishonesty taken by the Employee in connection with his responsibilities as an employee which is intended to result in substantial personal enrichment of the Employee,  (ii) Employee’s conviction of a felony which the Board reasonably believes has had or will have a material detrimental effect on the Company’s reputation or business, (iii) a willful act by the Employee which constitutes misconduct and is injurious to the Company, and (iv) continued willful violations by the Employee of the Employee’s obligations to the Company after there has been delivered to the Employee a written demand for

performance from the Company which describes the basis for the Company’s belief that the Employee has not substantially performed his duties.

(b)Change of Control.  “Change of Control” shall mean the occurrence of any of the following events:

(i)the approval by shareholders of the Company of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation;

(ii)the approval by the shareholders of the Company of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets;

(iii)any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; or

(iv)a change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors.  “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transactions described in subsections (i), (ii), or (iii) or in connection with an actual or threatened proxy contest relating to the election of directors of the Company.

(c)Change in Control Involuntary Termination.  “Change in Control Involuntary Termination” shall mean (i) without the Employee’s express written consent, a significant reduction of the Employee’s duties, position or responsibilities relative to the Employee’s duties, position or responsibilities in effect immediately prior to such reduction, or the removal of the Employee from such position, duties and responsibilities, unless the Employee is provided with comparable duties, position and responsibilities; provided, however, that a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity shall not constitute a “Change in Control Involuntary Termination;” (ii) without the Employee’s express written consent, a substantial reduction, without good business reasons, of the facilities and perquisites (including office space and location) available to the Employee immediately prior to such reduction; (iii) a reduction by the Company of the Employee’s base salary as in effect immediately prior to such reduction; (iv) a material reduction by the Company in the kind or level of employee benefits to which the Employee is entitled immediately prior to such reduction with the result that the Employee’s overall benefits package is significantly reduced; (v) without the Employee’s express

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written consent, the relocation of the Employee to a facility or a location more than fifty (50) miles from his current location; (vi) any purported termination of the Employee by the Company which is not effected for Cause or for which the grounds relied upon are not valid; or (vii) the failure of the Company to obtain the assumption of this Agreement by any successors contemplated in Section 6 below.

(d)Regular Involuntary Termination.  “Regular Involuntary Termination” shall mean any termination (other than a termination for Cause) of the Employee by the Company which is not within twelve (12) months after a Change in Control.

(e)Termination Date.  “Termination Date” shall mean the effective date of any notice of termination delivered by one party to the other hereunder.

2.Term of Agreement.  This Agreement will have a term of three (3) years commencing on the Effective Date.  Following the expiration of the three-year term, the Employee and the Company may, but are not obligated to, enter into a new agreement.  If Employee’s employment continues following the expiration of the three-year term, and the Company and Employee do not enter into a new agreement, Employee’s then current benefits arrangements shall continue in accordance with the terms of this Agreement until the Parties agree otherwise.

3.At-Will Employment.  The Company and the Employee acknowledge that subject to the provisions of this Agreement, the Employee’s employment is and shall continue to be at-will, as defined under applicable law.  If the Employee’s employment terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be established under the Company’s then existing employee benefit plans or policies at the time of termination.

4.Severance Benefits.

(a)Termination Following A Change of Control.  If the Employee’s employment with the Company terminates as a result of a Change in Control Involuntary Termination at any time within twelve (12) months after a Change of Control, Employee shall be entitled to the following severance benefits:

(i)Twenty-four (24) months of Employee’s base salary as in effect as of the date of such termination, less applicable withholding, payable in a lump sum within thirty (30) days of the Involuntary Termination;

(ii)one hundred percent (100%) of Employee’s bonus for the year in which the termination occurs;

(iii)all stock options and share purchase rights granted by the Company to the Employee prior to the Change of Control shall become fully vested and exercisable as of the date of the termination to the extent such stock options and share purchase rights are outstanding and unexercisable at the time of such termination and all stock subject to a right of repurchase by the

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Company (or its successor) that was purchased prior to the Change of Control shall have such right of repurchase lapse with respect to all of the shares;

(iv)the same level of health (i.e., medical, vision and dental) coverage and benefits as in effect for the Employee on the day immediately preceding the day of the Employee’s termination of employment; provided, however, that (i) the Employee constitutes a qualified beneficiary, as defined in Section 4980B(g)(1) of the Internal Revenue Code of 1986, as amended; and  (ii) Employee elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant to COBRA.  The Company shall continue to provide Employee with health coverage until the earlier of (i) the date Employee is no longer eligible to receive continuation coverage pursuant to COBRA, or (ii) twelve (12) months from the termination date.

(b)Termination Apart from a Change of Control.  If the Employee’s employment with the Company terminates as a result of a Regular Involuntary Termination during the term of this Agreement, then the Employee shall be entitled to the following severance benefits:

(i)Twelve (12) months of Employee’s base salary as in effect as of the date of such termination, less applicable withholding, payable in a lump sum within thirty (30) days of the Regular Involuntary Termination;

(ii)one hundred percent (100%) of Employee’s bonus for the year in which the Regular Involuntary Termination occurs;

(iii)continued vesting in Company stock options and share purchase rights granted to the Employee prior to the date of the Regular Involuntary Termination, for a period of twelve (12) months from the date of the Regular Involuntary Termination, with the right to exercise said stock options and share purchase rights within ninety (90) days from the end of said twelve-month period.

(c)Termination Apart from a Change of Control or Regular Involuntary Termination.  For avoidance of doubt, if the Employee’s employment with the Company terminates as a result of Cause, then the Employee shall not be entitled to receive severance or other benefits hereunder, but may be eligible for those benefits (if any) as may then be established under the Company’s then existing severance and benefits plans and policies at the time of such termination.

(d)Accrued Wages and Vacation; Expenses.  Without regard to the reason for, or the timing of, Employee’s termination of employment:  (i) the Company shall pay the Employee any unpaid base salary due for periods prior to the Termination Date; (ii) the Company shall pay the Employee all of the Employee’s accrued and unused vacation through the Termination Date; and (iii) following submission of proper expense reports by the Employee, the Company shall reimburse the Employee for all expenses reasonably and necessarily incurred by the Employee in connection with the business of the Company prior to the Termination Date.  These payments shall be made promptly upon termination and within the period of time mandated by law.

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5.Limitation on Payments.  In the event that the severance and other benefits provided for in this Agreement or otherwise payable to the Employee (i) constitute “parachute payments” within the meaning of Section 280G of the Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then Employee’s benefits under this Agreement shall be either

(a)delivered in full, or

(b)delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Employee on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.

Unless the Company and the Employee otherwise agree in writing, any determination required under this Section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon the Employee and the Company for all purposes.  For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Section 280G and 4999 of the Code.  The Company and the Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section.

6.Successors.

(a)Company’s Successors.  Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the Company’s obligations under this Agreement and agree expressly to perform the Company’s obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this subsection (a) or which becomes bound by the terms of this Agreement by operation of law.

(b)Employee’s Successors.    Without the written consent of the Company, Employee shall not assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of Employee hereunder shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

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7.Notices.

(a)General.  Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid.  In the case of the Employee, mailed notices shall be addressed to him at the home address which he most recently communicated to the Company in writing.  In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

(b)Notice of Termination.  Any termination by the Company for Cause or by the Employee as a result of a voluntary resignation or an Involuntary Termination shall be communicated by a notice of termination to the other party hereto given in accordance with this Section.  Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the Termination Date (which shall be not more than 30 days after the giving of such notice).  The failure by the Employee to include in the notice any fact or circumstance which contributes to a showing of Involuntary Termination shall not waive any right of the Employee hereunder or preclude the Employee from asserting such fact or circumstance in enforcing his rights hereunder.

8.Arbitration.

(a)Any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by binding arbitration to be held in Santa Clara County, California, in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”).  The arbitrator may grant injunctions or other relief in such dispute or controversy.  The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration.  Judgment may be entered on the arbitrator’s decision in any court having jurisdiction.

(b)The arbitrator(s) shall apply California law to the merits of any dispute or claim, without reference to conflicts of law rules.  The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law.  Employee hereby consents to the personal jurisdiction of the state and federal courts located in California for any action or proceeding arising from or relating to this Agreement or relating to any arbitration in which the parties are participants.

(c)Employee understands that nothing in this Section modifies Employee’s at-will employment status.  Either Employee or the Company can terminate the employment relationship at any time, with or without Cause.

(d)EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION.  EMPLOYEE UNDERSTANDS THAT SUBMITTING ANY

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CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, CONSTITUTES A WAIVER OF EMPLOYEE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:

(i)ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.

(ii)ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et seq;

(iii)ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

9.Miscellaneous Provisions.

(a)No Duty to Mitigate.  The Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that the Employee may receive from any other source.

(b)Waiver.  No provision of this Agreement may be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)Integration.  This Agreement and any outstanding stock option agreements and restricted stock purchase agreements referenced herein represent the entire agreement and understanding between the parties as to the subject matter herein and supersede all prior or contemporaneous agreements, whether written or oral, with respect to this Agreement and any stock option agreement or restricted stock purchase agreement.

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(d)Choice of Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules, of the State of California.

(e)Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(f)Employment Taxes.  All payments made pursuant to this Agreement shall be subject to withholding of applicable income and employment taxes.

(g)Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

COMPANY:	UTSTARCOM, INC.
	By:	/s/ Russell L. Boltwood
	Title:		General Counsel
EMPLOYEE:	/s/ Francis P. Barton
	Signature
	Francis P. Barton
	Printed Name

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EX-10.3

Exhibit 10.3

July 29, 2005

(Delivery by Facsimile and Overnight Courier)

Francis P. Barton

14720 Montalvo Road

Saratoga, CA 95070

Dear Fran:

I am pleased to confirm UTStarcom’s job offer to you for the position of Executive Vice President and Chief Financial Officer, with a starting date of August 1, 2005.  This position reports directly to Hong Lu, the Company’s Chairman, Chief Executive Officer and President, and is located at the Company’s headquarters in Alameda, California.

The key elements of this employment offer are as follows:

Salary:  Your gross annual salary is $500,000.  Paydays are on the 15^th and the last day of each month.  Direct deposit is available.

Signing Bonus: You will be paid a gross signing bonus amount of $250,000, payable upon the commencement of your employment with the Company.

Options:  You will be granted UTStarcom stock options and share purchase rights, as follows:

a)Stock Options: You will be granted UTStarcom stock options in the total amount of 400,000 shares, at the fair market value (i.e., market closing price) on the grant date, which shall be Monday August 1, 2005.  These options will be vested in four years from the grant date: 25% of the options will be vested after one year, and the remaining shares will be vested at 1/36^th per month thereafter.

b)Share Purchase Rights:  You will be granted UTStarcom share purchase rights (SPRs) in the total amount of 100,000 shares, with the opportunity for you to exercise these rights at a per share price of $0.00125 within 60 days of the date of this offer letter.  These SPRs will be vested in four years from the grant date: 25% of the SPRs will be vested after one year from the date of grant, 25% after two years, 25% after three years, and 25% after four years from the date of grant.

Annual Bonus:  For calendar year 2005, you will be eligible for a total gross cash bonus amount of up to $250,000, of which $125,000 shall be guaranteed to you.  Your total aggregate bonus will be based upon completion of mutually agreed upon performance objectives as determined by Hong Lu, and paid in February 2006.

Change in Control/Involuntary Termination Agreement:  You will be offered a change in control agreement between yourself and the Company, which shall include mutually agreed upon language which will provide that in the case of your involuntary termination from Company service (in a case other than change in control), that you would receive a gross payment equal to one year’s gross base salary (equal to the base salary in effect at the time of your involuntary termination); full payment of the gross annual bonus being offered at the time of your involuntary termination; and continued vesting in Company stock options and SPRs granted prior to the date of your involuntary termination for a period of twelve (12) months from the date of your involuntary termination.

Paid Time Off (PTO): You will be provided at the inception of your employment with an accrual rate for PTO equivalent to 25 days per year, which will continue during your employment with the Company pursuant to the Company’s policies relating to PTO accrual and use.

Transportation Assistance: The Company will provide for you, on a net taxation basis, a driving service to transport you from your home to the Company’s Alameda offices for purposes of work on Mondays through Fridays.

Please be prepared to provide proof of eligibility for employment in the United States on your first day of work, in compliance with the Immigration Reform and Control Act (Form I-9).  Additionally, this offer of employment is contingent upon completion of both personal reference verifications, and a criminal background check.  UTStarcom reserves the right to withdraw itsoffer of employment to you if the results of the reference verifications and/or the criminal background check are not satisfactory, in the sole judgment of UTStarcom.

As an employee of the Company, you will be expected to abide by Company rules and regulations. You will be expected to sign and comply with an agreement, which requires, among other provisions, the non-disclosure of proprietary information.

Under separate cover I will forward to you the following materials for your review: a proposed Change in Control Agreement (as described above); a proposed Indemnification Agreement; a Director and Officers’ Questionnaire; and a Power of Attorney regarding outside counsel’s filing of SEC Forms 3/4/5 on your behalf.

We are pleased that you have chosen to become part of the UTStarcom team, and wish you the very best as you begin your employment with UTStarcom. If you have any questions about UTStarcom or its benefit programs, please feel free to contact either myself at 510-749-1530 (or Russell@utstar.com), or Ed Hudson, the Company’s Director of Human Resources, at 510-769-2828 (or ed.hudson@utstar.com).

Please sign one copy of this letter to indicate your intent to accept the terms and conditions of this offer letter, and please return the signed copy to the Human Resource Department confidential fax at (510) 338-4395.

Sincerely,

Russell L. Boltwood

General Counsel/CHRO

I accept the terms and conditions of this offer letter, and I understand that it replaces those of any earlier offers of employment (if any).

Signed:	/s/ Francis P. Barton
	Employee Signature
Print Name:	Francis P. Barton
Date:	July 29, 2005